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American Foundations and the Politics of Philanthropy

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by Houman Barekat

‘I have sometimes thought that there is no being so venomous, so bloodthirsty as a professed philanthropist’, remarked Anthony Trollope in North America (1862). The motivations of charitable institutions have long been the subject of suspicion and conjecture; in the century-and-a-half since Trollope wrote, the purview of philanthropy has increasingly overlapped with the domains of both private commerce and public or ‘state’ functions. There is a postmodernist-inspired school of thought that would see this as a thing to celebrate: the rise of a plethora of foundations and other NGOs – implicitly apolitical and neutral – winning back some power from the state and the private sector on behalf of a disinterested munificence. 

Philanthropists invariably present their work in purely altruistic terms – but if it were merely a question of ‘giving something back’ then why, for example, do the likes of BP and BNP Paribas – both regular sponsors of art exhibitions in London – persevere with patronising the arts when they might just as easily invest in several dozen homeless shelters and make a great song and dance about that instead? This preoccupation with the intellectual sphere, as opposed to simple poverty alleviation, is a key characteristic of elite philanthropy, because its work is intimately connected with the attainment and exercise of power and influence, not directly through formal political structures but through moral leadership – what Marxists call hegemony.


Ford Foundation Building, New York City (photo by Stakhanov/Wikimedia Commons, released under CC Attributions 3.0 Unported License)

In this well-researched study, Inderjeet Parmar, a Professor of Government at Manchester University, examines the rise of the philanthropic foundations as a political force, first within the United States and later, after World War II, as an unofficial wing of the US foreign policy establishment. Though they are dwarfed today by the dizzying wealth of the Gates Foundation, America’s original ‘big three’ foundations – Ford, Carnegie & Rockefeller – played a leading role in building and sustaining US global leadership in the last century.  While their mission statements invariably made reference to achieving economic betterment for the ‘general population’ or ‘the people’, the foundations largely failed in their stated aims of eradicating poverty and improving living standards for the poor, a failure they readily admitted. As the century wore on, their humanitarian goals were gradually marginalised in favour of a utilitarian, technocratic managerialism. National economic development – rather than social ‘uplift’ as such – was their overriding goal; the distinction is subtle but important, illuminating the broader distinction between a ‘nation’ and its ‘people’. This is, therefore, essentially a book about the relationship between state and society, and about how power works within that relationship. 

Though formally aloof from the state and the marketplace, the foundations have a symbiotic relationship with both. Drawing heavily from Gramscian discourse on hegemony, Parmar notes that ‘state penetration of society and vice versa are so deep and comprehensive – physically, politically, ideologically, psychologically, and organizationally – that it is almost impossible to say where one ends and the other begins.’ Orthodox political theory sees state power in terms of a ‘zero-sum’ arrangement, with state and private interest groups as mutually exclusive forces. But history tells us that the state was itself an agglomeration of private interests long before electoral democracy gave it its sense of democratic legitimacy – the state was never, ontologically, of the people, and the ‘public’ of yesteryear was an educated minority, not the ordinary man and woman.  Viewed in this light, the blurring of boundaries between public & private spheres that we see in the work of the foundations is less anomalous than it might initially appear.

The rise of the foundations in the 20th century coincided with the ascendancy of an East Coast liberal internationalist milieu determined to impose its progressive capitalist vision on an insular and backward-looking traditional elite. In the 1920s & 30s, the United States was experiencing what Richard Hofstadter has called a ‘psychic crisis’, characterised by social convulsions: industrialisation, mass immigration, rapid urbanisation, and large-scale protest movements including violent strikes and industrial unionism. Against a backdrop of growing popular interest in utopianism and socialism alongside the rise of the Christian social gospel, the more attuned sections of the ruling class coalesced around a doctrine of moderate reform in order to militate against the spread of radical politics and usher in a new era of responsible nation-building. By the time the country was back on its feet, the foundations had become a prominent fixture in public affairs, and were well placed to spearhead America’s increasingly assertive global role in the wake of the Second World War. The modern ‘foundation’, Parmar explains,

‘mediated between the modern university and the state and between universities and big business. The foundation organized crucial state agencies, international corporations, and the universities behind a hegemonic project of domestic federal-state building and US global expansion: Progressivism and imperialism went hand in hand.’


U.S. President Nixon greeting General Suharto of Indonesia, outside the White House (photo by Oliver F Atkins; released into the public domain by the White House Press Office)

The Ford Foundation assisted the foreign policy establishment by providing institutional settings, organisations, conferences and seminars – a whole technical infrastructure aimed at uniting what Parmar calls a ‘historic bloc’ of support behind the US imperial project. A case study on Indonesia brings this abstraction to life: A foundation-sponsored programme of cooperation between the University of California and the University of Indonesia ran from 1956 to 1962. The American university provided ‘faculty collaborators’ in economic and fiscal affairs, business and agricultural economics and sociology. US thinkers obtained an important foothold in Indonesian public affairs, strengthening their understanding of the country’s economy and society, while inculcating free market ideology within a burgeoning – and at this time comparatively unformed – Indonesian intellectual stratum. The US thus cultivated a posse of comprador intellectuals, an important precursor to the traumatic events of 1965-66, the bloody military coup that culminated in General Suharto’s dictatorship and the management of the Indonesian economy by a junta of US-trained right-wing technocrats comprising many of these same ‘Berkeley Boys’.  As well as supporting the university link-up, the Ford Foundation had provided long-term funding to a number of key figures in the Indonesian military in the years leading up to the coup. On its own terms, the link-up was an unqualified success. As Parmar observes, this was one clear instance where ‘Ford’s initiatives dovetailed with and complemented those of the American state.’

A further case study on Chile paints a similar picture. US support for the Pinochet coup has been exhaustively documented elsewhere, and had as much to do with brute force as ‘soft power’; what is particularly interesting about Parmar’s chapter is his analysis of how US foundations helped re-shape Chilean political culture in anticipation of the return to parliamentary democracy. Foundation-approved economists helped forge a new political orthodoxy on Chile – an orthodoxy so radical that it transcended ‘left’ and ‘right’; antagonistic not only to socialist economic models, but also to the right-wing nationalist economics inspired by dependency theory that had proved so popular in Latin America in the post-war years. The goal was to root out not only socialism but anything resembling statism.

Under foundation tutelage, a barely distinguishable set of ‘opposition’ technocrats would eventually replace the ‘Chicago boys’ (the US-trained economists of the Pinochet regime), once electoral democracy was restored in the 1990s. The Chilean people were offered a choice between a free market party and a free market party with the mildest statist leanings – mirroring, in many respects, the Republican vs. Democrat choice in the US. Chile thus emerged from the Pinochet years with a radically different political culture, quite unrecognisable from the more authentic pluralism of the pre-Pinochet years; the political left in particular was now almost completely marginalised.

The American Century of the book’s title is, of course, the last century. Today, the US finds itself economically and militarily weakened; it remains, however, the world’s only superpower, and its attenuated global status suggests it should be all the more reliant on the ‘soft power’ of its philanthropic networks. Parmar’s book follows an important tradition of studies of the historic development of intellectual institutions and their role in shaping nations and ideologies. Perhaps the seminal example of the latter is Christophe Charle’s La Republique Des Universitaires (1994), which charts the French state’s efforts to re-construct its national mission after the catastrophe of the Franco-Prussian war. With its particular focus on US-led globalisation, Foundations of the American Century also owes a considerable debt to the liberal economist John A. Hobson who, in his study Imperialism (1904), was among the first theorists to consider the role of philanthropic institutions as part of a machinery of economic expansionism.

The book succeeds because the author avoids the trap of implying an unmediated vertical relationship between the philanthropies and the political and economic elites whose goals they ultimately served. A defining characteristic of the East Coast liberal internationalist was their understanding of the need to twin elite authority and popular (moral) authority as a prerequisite of a dynamic and modern capitalism – theirs was not some stagnant oligarchy. This nuanced approach, a healthy antidote to the simplistic determinism which, regrettably, informs so much of the leftist discourse on US ‘elites’, is exemplified in Gramsci’s concept of a ‘state sprit’ – ideology as a state of mind rather than something that has to be actively enforced – which is neatly borne out in a sardonic obervation from Harold Laski: ‘the foundations … have only to indicate the immediate direction of their minds for the whole university world to discover that it always meant to gravitate swiftly to that angle of the intellectual compass.’

Inderjeet Parmar: Foundations of the American Century. The Ford, Carnegie, & Rockefeller Foundations in the Rise of American Power
Columbia University Press, New York 2012.
IBSN-13: 978-0-231-14628-9
Hardcover, 368 pages, GBP 27.50 

Houman Barekat is a London-based writer and editor of Review 31. He is co-editor, with Mike Gonazalez, of Arms and the People: Popular Movements and the Military from the Paris Commune to the Arab Spring, forthcoming from Pluto Press.

(c) 2012, The Berlin Review of Books.